Amtrak Financial Condition Has Deteriorated And Future Costs Make Recovery Difficult

T-RCED-94-155 Amtrak: Financial Condition Has Deteriorated and Future Costs Make Recovery Difficult

Pursuant to a congressional request, GAO discussed Amtrak's financial condition and the challenges facing the corporation. GAO noted that: (1) although Amtrak has improved its revenue-to-expense ratio, its budget requests have increased steadily; (2) Amtrak's ability to repay its debt and provide quality nationwide service may be jeopardized because its financial condition has significantly deteriorated and annual operating deficits total $102 million; (3) although Amtrak's efforts to generate additional revenue and reduce operating expenses have helped short-term financial problems, these actions will not be able to cure its long-term financial problems; (4) Amtrak will need to maintain its aging passenger cars, modernize its repair facility and locomotive and passenger car fleet, acquire high-speed trains, continue rail improvements in the North Corridor, and negotiate new agreements with freight railroads and labor unions to operate a viable nationwide network; and (5) Congress will need to review Amtrak's overall objective, ensure that Amtrak's budget is adequate to meet any new rail service goals, and reauthorize Amtrak's 1995 budget to help it address its operating deficit.